Thank you to everyone who took the time to join HomeAway in Las Vegas last month. RezFest 2013 went down in history as one of the largest vacation rental conferences on record. The nearly 900 registered attendees spent three days learning, networking and having fun together. The show was buzzing with energy, new ideas and product announcements poised to make professionally managed vacation rentals stronger than ever.

Across the keynotes, the software and listings lab, educational sessions, HomeAway lounge and countless one-on-one interactions over lunch, dinner, drinks, bowling and more – everyone learned from one another in a casual and professional environment. The active participation of each property manager in attendance helps drive continual growth and improvement in the vacation rental industry. View this quick video from property manager Roy Wiltshire who attended and greatly benefited from RezFest.

RezFest 2013 was another major step forward in demonstrating HomeAway’s commitment to helping vacation rental managers succeed. Time and again we heard from customers about how innovative and informative the breakout sessions were as well as the demos conducted by Tom Hale (HomeAway’s Chief Product Officer) and his product team. From showcasing our newest Lead Management module to our new Housekeeping and Maintenance Mobile App and our new Reservation Grid, the words ”operational efficiency” resonated throughout the event.

In addition to major software feature announcements, HomeAway CEO Brian Sharples unveiled two industry game changers:

HomeAway’s new pay-per-booking listing model which enables property managers to advertise all or most of their inventory on HomeAway.com with no upfront fees under a pure pay-for-performance model at a 10% commission.

The Professional Referral Network presents vacation home owners interested in listing on HomeAway.com with the option of enlisting the services of a vacation rental manager as an alternative to marketing and managing the home themselves. This major initiative gives vacation rental managers the ability to market their services to the millions of owners who visit HomeAway to list their properties.

Our sponsors provided enormous value to property managers by showcasing their products and services. Direct feedback from satisfied property managers who learned and signed up for a number of services from sponsors at the conference were rampant. And, several sponsors mentioned they sold more at RezFest in 48 hours than at all industry events combined! So, a big thanks to all sponsors for attending RezFest and delivering great value to property managers with a variety of new and innovative products and services.

Thanks again to everyone who made RezFest such a big success!

We are looking forward to an even bigger and better conference in 2014!

Before 2012 becomes a distant memory, we wanted to recap a few of the many things we focused on during the past twelve months. Our goal is to be nothing less than the best software provider in the vacation rental industry. We work towards this goal by paying attention to details, innovating, continually improving our customer support, and streamlining how you interact with HomeAway®; and our partners. In 2012 we focused on a number of initiatives to create the best possible software and services for our customers.

Sweating the details

Providing the best possible software means focusing on hundreds of small things. One of the consistent pieces of feedback we’ve heard from you is that you'd like for us to maintain our focus on supporting, maintaining, and improving the products you use to manage your businesses every day. We take that responsibility very seriously and are committed to that work.

We have made more than 700 enhancements to our software products. That’s more than two enhancements to our products every business day of the year! And while any one of those features may be small, each of those enhancements has to be designed, defined, coded, tested, and released into production.

These enhancements represent improvements to every product we have in the HomeAway Software portfolio. In addition to product feature enhancements, we also addressed hundreds of issues that you reported.

We also spent time on things that you may have barely noticed. For example, we moved hosting for V12.NET® to our world-class hosting facility in Austin, Texas. This move was a huge and complex project! We see it as a big sign of success that almost no one noticed the change. Over time, our customers will reap the benefits of improved speed and performance and higher reliability.

Another area where the payoff is often unseen by customers is our investment in enhancing the security of our applications and payment transactions. Data security is important to your business, as you store sensitive information on a daily basis. The work we do to fortify our credit card security and login information is designed to protect you and your customers.

Bright, shiny, and new

In addition to hundreds of minor improvements, we also invested significant development effort into a number of major enhancements. Examples include accounts receivable management, occupancy-based yield management and budgeting in V12, and account period closing, bulk unit, and owner contract setup in Escapia®.

What makes product development people like us especially excited is diving into big problems faced by customers and building something cool that can make a positive impact on our customers’ lives.

After listening to you, we discovered that many of you needed help managing a dramatic increase in the number of inquiries you receive. While receiving a flood of inquiries is a good problem to have, it is a problem nonetheless. As a result, we put some of our best minds on the job and designed the largest new feature module added to our software in many years: Lead Management. This new module helps you prioritize, track, and respond to all incoming inquiries from all marketing sources, thus helping your reservations agents maximize conversion rates like never before. We released this module as a beta, and it will soon be generally available for Escapia users. Support for V12 users will be coming thereafter.

Another major change in the way vacation rental managers manage information is the increasing use of mobile devices. Last year we released a mobile housekeeping app for V12 on both Android and iPhone. By partnering with leaders in the industry, we provided interfaces that enable mobile solutions for guests and members of your staff. We also had a great time collaborating with customers at RezFest® to envision mobile solutions that would make the biggest impact on your businesses. As proof of our commitment to mobile technology, we’ve hired a new Vice President of Mobile Development to ensure that we have the best mobile solutions for our customers in the future.

“How can I help you today?”

Vacation rental management is a complicated business; we hope our products make the management a lot easier. Still, there are plenty of times when you simply need to talk with someone who can explain how to use your software to get something done.

There are few things more gratifying than going to RezFest and seeing customers hugging a support technician who has been there for them time and again. As any of you who have called or emailed our customer support staff know, they are incredibly knowledgeable and dedicated experts who combine product knowledge with an understanding of the day-to-day needs of vacation rental managers.

Some of you may have had the pleasure of meeting Dan Rourke, our Director of Customer Service. Dan, who was hired last year, has already made significant progress laying down the foundation to improve our customer support organization. He rolled out a new phone system, which allows us to track and improve the performance of our support staff. He’s focused on providing coaching and feedback for our support team so everyone continues to polish their skills and drive for continual improvement. We’ve also brought onto the team a documentation specialist who helps us create stronger support information for our products so that customers can access solutions, tips, and other information on demand.

Our belief is that the only way to serve customers well is to listen closely to what you are telling us. This year we launched a feedback survey, which lets you grade us after you receive service from one of our support representatives. We also do regular surveys to learn more about your needs. We use this input to make well-informed decisions about what will best serve your business. Thank you for taking the time to provide feedback. Whether it's praise for someone on our team, or a request for us to focus in a certain area, we appreciate your input. Your honest feedback is critical to helping us do our best.

Connecting you to others

One of the wonderful things about the vacation rental business is the wide range of companies, large and small, committed to serving vacation rental managers. 2012 marked another year of significantly adding to the broadest partner portfolio in the industry. We connect to so many companies so you can access the programs they have to help you build your business.

Many of those partners are in the vacation rental listing and distribution business. We added more than 20 new channel partners in the past year, bringing the number of distribution sites accessible through a data interface to over one hundred.

Our goal at HomeAway Software is to make it easier for you to manage your vacation rental business. As a division of HomeAway, we have a unique opportunity to make it easy and attractive to take advantage of the marketing programs that HomeAway offers on our listing sites.

A recent step we made toward this goal is enabling you to integrate your software with listings on VRBO.com™. This improvement allows you to take advantage of one of the most powerful lead-generating sites in the world. In addition, we rolled out a pay-per-subscription model for Escapia customers, which includes Brand Boost and access to tiered pricing on HomeAway.com®, letting you maximize your visibility and brand presence on HomeAway. While we still have work left to do in order to make this process operate perfectly, we know it will help reduce the time it takes to maintain listings on our sites.

One of the benefits of being a property manager is that you qualify for the lowest rates available today for listing properties on HomeAway.com. We recognize the volume of listings you have and we reward your decision to place a high percentage of those listings on HomeAway.com by providing reduced prices relative to those placed by individual homeowners. We also have a new program that recognizes property managers who use HomeAway for their software as well as to advertise their properties. Vacation rental managers can now earn a discount on their annual software fee by increasing listings on HomeAway sites. If you are interested in growing your listing program on HomeAway.com or VRBO.com, reducing your annual software fees, or taking advantage of the new interfaces, let your relationship manager know.

By maintaining and supporting the products we have today, creating breakthrough solutions to serve new needs, providing world-class customer support, connecting you to a vibrant industry, and helping you take advantage of the world’s best marketing sites for vacation rental managers, we feel that we’re focused on what it takes to be the best software provider in the vacation rental industry.

Thanks for letting us serve you in 2012 and in the year ahead. Those of you who were at RezFest in Las Vegas this past September may remember a quote I used in my comments that is attributed to one of the pioneers of technology in Silicon Valley: “The best way to predict the future is to invent it.” We’re looking forward to another year working with you and our partners to “invent” the future of the vacation rental industry together.

Thanks to every customer and partners who took time away from their busy schedules to join us in Las Vegas in September for three days of networking, fun and tons of learning. At its heart, RezFest is about educating our software customers on how to get the most out of their investment in our software products. We offered over 80 sessions on a wide range of topics. To our normal slate of stellar educational sessions we added advanced classes and a mobile app challenge to convey how important it is to develop products with input from our clients. As always, the interactive lab was an unparalleled opportunity for customers to get face-to-face training with our experts. Kudos to our unbelievableSupportteam for spending so much time preparing and presenting valuable information to our clients.

By measure of the 600+ attendees with whom we spoke at the event, combined with extremely positive post-event survey feedback, customers acknowledge RezFest as the premier technology conference in the vacation rental industry.

At RezFest last year we asked the industry to “judge us by what we do,” not by speculation. We told the industry we would develop a new tool to help them manage the explosion of leads from potential renters. And we said we would not only develop that tool but would use it to demonstrate that we can build solutions that work with multiple platforms in our six-system portfolio. With the demo of the lead management system (LMS), we did exactly that. We added what is likely the biggest addition to our existing software products in years; all while constructing a new way to build our products. Without question, the LMS was one of the hot topics of RezFest! Customers not only responded extremely well to what we demoed, but when asked what they want us to focus on going forward, the message from many of them was “do more of that.” In other words, property managers see LMS not just as a new feature that will soon be available to them but also as a launch pad for a lot of features that will help them build stronger businesses for years to come.Learn More about LMS here.

In the past nine months our product team has been hard at work making your software more effective and secure. With over 30 releases, 508 enhancements on six end systems and 1,000 defects resolved, we continue to make significant progress to deliver category-leading software to all clients. And, rest assured we have no plans to discontinue support on any of our legacy products.

We’ve also heard property managers ask for improved integration between HomeAway Software and 3rd party distribution. Now, all of our customers can distribute inventory via their software interface on VRBO.com as well as HomeAway.com and all of our customers including EscapiaNET can participate in pay-per-subscription programs that allow them to take advantage of tiered pricing to maximize their visibility and Brand Boost to highlight their brands on our sites.Learn more about distribution here.

Lastly, we received feedback from HomeAway PM clients requesting to receive discounts when using both our software and the HomeAway Network of sites. In addition to the new listing volume discounts, you can now “bundle” new listings with your annual software maintenance and support renewal and save on your annual fees. Your Relationship Manager will contact you about this opportunity prior to your annual maintenance and support renewal month.

Our goal for this year was to deliver on our promises to be “judged by what we do” and lay out our 2013 business strategy in order to heighten the level of trust and confidence PMs have in HomeAway’s people and vision. We wanted to leave the “elephant in the room” behind and establish a trusting relationship with property managers to help grow this industry together! Based on direct feedback from RezFest attendees (see testimonial videos here), the atmosphere was really positive with more and more customers appreciating that HomeAway truly is committed to helping property managers succeed in the world of online vacation rentals. We feel our clients left Las Vegas inspired, excited and confident in choosing HomeAway as their strategic business partner not because of what we are but because of what we do.

Through its ownership of listing sites and reservation software companies, HomeAway straddles a line that marked a cultural gap between professional managers and self-managing homeowners.

That gap is on the verge of disappearing. This is good for managers, homeowners, renters and HomeAway—as well as the entire vacation rental industry.

The gap began when the Internet spawned listing sites that allowed homeowners to advertise their own vacation rental homes under the rubric “rent-by-owner” (RBO), bypassing managers.

These listing sites provided resources for homeowners interested in self-management and for financially stressed homeowners struggling to cover the expenses of second home ownership. Today, they offer:

Credit cards payment options

Taxes collection and remittance options

Online bookings

Reservation confirmations

Payments tracking

Housekeeping or maintenance service options

On the other side of the gap, some professional managers wondered whether the RBO movement threatened their livelihood. Some managers viewed RBOs as a danger to be avoided or fought.

Mangers and RBOs on both sides rallied to promote or protect their interests:

Some early RBO listing sites refused listings by professional managers.

Some self-help resources portrayed professional rental managers as cheats and unnecessary.

Some managers lobbied to exclude RBOs from local chambers of commerce.

Web site discussion groups for both groups made polarizing statements about the other.

The reasons for friction are easy to understand. Technology evolution shifts money from one group to another, creating opportunities for some and problems for others.

In reality, the shift occurred because Internet technology changed the way consumers shop. This was first reflected in the popularity of online travel agents such as Expedia, Travelocity and Priceline. Today, consumers have transformed listing sites into the most popular market places for vacation rentals.

Today managers needn’t worry about being displaced. And RBOs needn’t view managers as competitors— their real competitors are other homeowners. Managers exist to serve homeowners (all homeowners are potential customers). Today’s RBO may be in a managed rental program tomorrow.

Managers perform services that save homeowners from tedious and stressful tasks of dealing with customers and servicing homes. Homeowners typically use managers when they can afford to do so, except where they make rental management their “job.” (My next blog is about the impact of rent-by-owner on professional managers).

Managers need not worry that renters do or do not recognize the advantages of professional managers. Not only does this worry treat RBOs as competitors (potentially alienating future customers), but it channels energy (a scarce resource) to an unproductive end and assumes that managers’ future success depends on a public-awareness-of-rental-managers campaign that would cost tens of millions yearly.

Managers, while this may initially sound heretical, your success doesn’t require renters to appreciate managers or even know that a home is managed. It is gratifying and helpful when that occurs. But it is not critical. Thank goodness—it means homeowners and managers are in harmony—not conflict.

Why? Rating systems –which matured after RBO appeared—have emerged as an indirect champion of your brand as a professional manager. Your systems are designed to deliver high quality, consistent service. When that works, your homes get good reviews.

Rating systems allow renters to identify which homes are well maintained and appointed.

Managers will always thrive where their systems generate good renter reviews.

Plus mainstream listing services identify managed homes as such for renters who look for this.

If a RBO home next to yours gets good reviews, it is usually because that homeowner is working very hard to do what you do. That homeowner deserves to get rentals. That same homeowner may eventually tire of working so hard, or have no time to do so, and hire you to do some or all of his work.

Today, there are still some RBOs and managers who distrust each other. Some RBO groups worry that:

The presence of managed homes on RBO sites dilutes their bookings; or that

Many of these worries once had some basis in fact. But today the impact appears minimal.

Booking Dilution. Today, leading listing sites market managed and self-managed homes side by side. I see no evidence that this can/should be avoided or that it dilutes or diverts bookings from one group:

It is consumers who decide the popularity of listing sites-- consumers are patronizing the sites that offer the widest range of product and price.

Renters love to use the Internet to shop—they have so many options that no single company could thwart consumer shopping preferences (aggregator services today search multiple sites).

Renters use the Internet to find and compare all available homes—Internet shopping technology is the driver of integrated market places, not listing site policies.

Resource Advantages. It is obvious that professional managers have marketing and service resources advantages—this is a common sense result where managers spread the service costs among multiple homeowners. That’s why so many homeowners hire managers. But hardworking RBOs compete well.

Renters simply want a well serviced home that meets their needs and is competitively priced.

No RBOs can be at a disadvantage if they service their home well and price competitively.

In my experience, renters tend to find the good homes—even where lesser homes have superior marketing exposure.

A manager’s pooled resources (e.g., backup cleaners) confer advantage where this results in better or more consistent service (reflected in the reviews).

RBOs lose rentals to professional managers and vice-versa when they are not able to provide high quality service. Many RBOs will eventually hire managers for some or all services.

Tax Collection. Interestingly, I have seen no evidence that professional managers are losing bookings to RBOs who ignore tax collection requirements, at least not in measurable dimensions. This is due in part to local tax authorities who are ramping up tax enforcement and to efforts to educate homeowners. Also, renters appear most concerned about finding the right home at a competitive price—it takes a lot of extra work to identify a homeowner who won’t charge tax (homeowners can’t advertise that fact).

One of the most successful professional managers on HomeAway sites tells me that his bookings are not remotely affected by RBOs who do not charge tax. He says he is not interested in renters who take bargain hunting to this extreme and that it is his attention to inventory quality and marketing that brings him bookings and growth.

Underpricing. It is true in theory that some self-managing homeowners try to offer lower rents and feel empowered to do so because they do not pay a professional manager. But I see no evidence that self-managed homes end up with lower rents or that they divert renters from managers based on price:

Professional managers initially set rents at levels that renters are willing to pay—given all the competing homes that are being offered in the area. They then adjust rents as necessary.

RBOs commonly set rents based on comparable managed homes. Even though they don’t pay managers, most RBOs can’t afford to charge too much less rent than renters are willing to pay.

A percentage of RBOs do try to under price managers in an effort to attract renters.

This stimulates discounting by managers. Managers track bookings pace from one year to the next and are quick to discount prices when current year bookings are slow, equalizing rents.

For every discounting RBO, there is a hungry homeowner demanding that his rental manager discount his rent so he can snag a renter or a manager who discounts to fill vacancies.

The net effect is that rental home prices adjust the way that stock prices adjust. They simply rise and fall on a weekly or daily basis in response to shifting balance between supply and demand.

Stay tuned for my next blog will summarize the impact of the rent-by-owner trend on professional managers.

We are just weeks away from hosting RezFest 2012 on September 25-27 at the beautiful Red Rock Casino and Spa in Las Vegas! The excitement is building as we prepare for this incredible event where leading property managers gather to learn, network and have fun together for a couple of days. To make this event even more fun this year, we are launching a ”Mobile App Challenge,” which consists of gathering ideas from our clients through a 5 minute survey. Once at RezFest, you will have an opportunity to check out the best ideas from the survey, vote on them and work with our Product Managers and Software Designers to help them build a prototype, which will be presented to you during RezFest’s closing session. Whether you attend RezFest 2012 in person or not, you can contribute your ideas through this survey and automatically qualify for a chance to win some great prizes, such as an iPad, Bose Noise Reduction Headphones or a membership to the "Wine of the Month" club. Take our 5 minute survey before August 15th for your chance to win!

If there is one educational event you must attend this year, RezFest is it! At this exceptional event, you will hear from Tom Flick, whose keynote sessions have inspired companies like Ritz Carlton, Starbucks and Boeing. You can also expect HomeAway® executives to make some PM-centric announcements you want to miss! With almost 100 sessions and 9 concurrent tracks, RezFest is your once-a-year opportunity to sit down with your software trainers for free to see demos of our latest features. As always, you can count on our social events to have fun while learning and networking with other leading property managers. So, make sure you bring enough staff at all levels of your organization, because your biggest regret will be that you didn’t bring more employees with you to take advantage of all the learning opportunities!

As the newest member of the HomeAway Software™ marketing team, Carmela joins us with many, many years of vacation rental industry experience, making her ideally suited for her new role as our Marketing Product Manager.

Carmela started her VR industry career at First Resort™ Software as their second Support Representative. She progressed through the ranks to become the Support Department Manager and then Vice President and Chief Operating Officer until 2004. From there, she moved on to ResortQuest to become Director of Operations, and then VP of Information Technology. Most recently, she served VR companies across the country as a business development consultant. Through it all, Carmela has driven quality customer service, matched technology to client needs and discovered efficiencies while doing so.

Carmela grew up loving football in Arkansas (Go Razorbacks!), moved to Colorado in 1988 (Go Broncos and Buffaloes!) and recently relocated to Austin. She has a daughter who is a college senior, two dogs, a cat, and everyone gets along great! Her hobbies include a love for tennis (because of the cute outfits), golf, hiking, all winter sports, entertaining, fresh local food, wine and flowers. Says Carmela, “Flowers just make me happy!”

“I am passionate about the vacation rental industry mainly because of the people who are in it—you have to be a ‘people person,’ you have to be creative, you have to be smart and you have to be passionate about delivering great customer service. Also, I know my successes are because of the individuals with whom I have worked. They are very talented (very lucky here too!) and I believe a team is much stronger than an individual.”

As Product Marketing Manager, Carmela will help identify and prioritize feature requirements on HomeAway’s® software platforms and help us communicate the great things we do on behalf of our clients. She is amazingly bright, caring and fun, and we are thrilled to have her aboard with HomeAway Software. When you get a chance to meet her, perhaps at the RezFest® conference this year, you will find yourself putting her on your short list of super smart people who also happen to be very, very nice.

Due to the overwhelming attendee feedback from last year’s RezFest®, HomeAway Software for Professionals™ is proud to announce a repeat of the most vibrant and comprehensive software user conference for property management companies of all sizes on September 25 - 27, 2012 at Red Rock Casino in Las Vegas, Nevada. Join us for an incredible 2-day event where you will learn firsthand about the latest industry trends, imminent technology changes and most importantly, tangible ways to take your vacation rental business to higher levels of efficiency than you’ve ever imagined. This year, we challenged ourselves to outperform last year’s success, which is not going to be easy after what we heard last year:

“RezFest 2011 was the best conference I have attended in 10 years,” said Doug Byron from RE/MAX Lake Travis & Co.

You won’t want to miss the most valuable industry event and miss an opportunity to spend 2 1/2 days learning and networking with the most innovative property managers in the industry while having fun at the Red Rock Casino, Resort and Spa with all of us. This venue offers exquisite hotel rooms and suites with an unmatched combination of comfort, extravagance and value. Guests at the Red Rock Casino, Resort and Spa are pampered with every comfort and convenience imaginable, from luxurious bed linens to iPod jack sound system in every room and in-room spa treatments by appointment.

“RezFest is not only a wonderful way to keep your finger on the pulse of the vacation rental industry, but also a terrific opportunity to network and interact with some of the most innovative minds in the field.” (Mark Carraway - Meyer Vacation Rentals)

In addition to over 80 educational sessions to choose from and evenings of fun-filled events, you will hear from two extraordinary keynote speakers. Brian Sharples (CEO of HomeAway, Inc), who has lead the biggest revolution in the travel industry in decades, and Tom Flick. Mr. Flick has provided guidance to world class companies, including Starbucks, Ritz-Carlton, Boeing, Marriott and dozens of others. His insights have inspired sales teams, executives and managers from some of the greatest companies in America—who have asked him to return year after year. HomeAway is excited to have Mr. Flick speak about teamwork, performance and growth to the greatest companies in the vacation rental industry. And as a hands-on owner and user of vacation rental properties, Mr. Flick is bound to surprise you with leadership ideas you can apply to your business immediately.

You can attend RezFest 2012 for less than $240 if you take advantage of our “early bird” pricing, a $260 saving over our rack-rate pricing! So Register Today and receive the best possible value of any industry conference!

We just launched the 2012 Breakfast Seminars in Destin, Florida and Gulf Shores, Alabama. Both were great events and very well attended with over 50 attendees at each event. The feedback from each seminar was universally positive.

At the seminars, the team gave an update on our plans for all five of our HomeAway Software for Professionals™ platforms: Entech™, PropertyPlus®, FRS®, Escapia® and V12.NET®. We reiterated our commitment to continue development and support for all of them. We will continue to support all five software platforms well into the future as long as our clients want us to because supporting the products will continue to be a profitable business for us. More details on our product development plans are on the way in the coming weeks, but as a public company we are not allowed to make any forward looking statements so it is a difficult balance.

Our sponsors also presented an update on very important current issues including Credit Card Security by HomeAway and VacationRentPayment, the Five New Marketing Best Practices by Visual Data Systems and Selling Value-Added Travel Services by CSA Travel Protection.

But our primary message at the breakfast seminars is that it’s time to get excited! Think about this: roughly six million Americans use vacation rentals for their vacation lodging. That’s six million out of a traveling population of over 100 million. With that as a backdrop, it leaves a huge upside for you to advance your business. HomeAway is constantly efforting to increase the visibility of vacation rentals. If you haven’t seen our most recent ad campaign called “Let’s Stay Together,” check it out here.

Along with increasing the visibility of the vacation rental industry through advertising, we’re continuing to develop new capabilities on our software solutions so you can take advantage of that heightened visibility. And, we’re constantly improving our online marketing tools for professional managers. Stay abreast of all product advancements through your Relationship Managers and a new quarterly newsletter, the first of which you will receive later this month and we hope to see you at the next Breakfast Seminar!

I know what many of you want to do. But what makes business sense? The right approach is the one that leaves you with the most rental revenue. Unfortunately, the right approach is not always the most intuitive and can require you to speculate about customer behavior.

If you lower rents or commissions once, will you brand yourself “price flexible?”

Once you discount, will it be difficult to hold your regular prices with other or repeat customers?

If you refuse to discount, will you lose rentals or homeowners?

Will losing renters or homeowners snowball into migration of other homes and renters?

No one sets prices with complete certainty but you can perform the best if you have good technique and strategy. A good approach is to view pricing like a sports event that has both an offensive and defensive strategy.

For offense, begin by setting seasonal prices correctly and by knowing whether or not it is in your interest to use discounting to grow or protect your business, and how to discount most effectively.

For defense, create a foundation that will withstand competitive discounting by building knowledge of your product and markets and developing a business philosophy that is grounded in economics.

As to business philosophy, be wary of general principles that have brought you this far but which you promote and defend with emotional energy (we all have them):

“We deliver good value and we never discount.”

“If I discounted, I would undermine my ability to maintain my pricing structure.”

“If I don’t match every discount, I’ll lose rentals and homeowners.”

The best business philosophy recognizes:

Vacation rentals will always make financial sense no matter how low rents go as long as vacation homes continue to offer more value for the dollar than alternative lodging segments

There is little you can do to protect a homeowner’s investment against discounting that arises from seasonal vacancies, predatory competitors or market downturns

Price flexibility (dynamic pricing) a necessary evil

There are opportunities to protect your pricing

Knowledge of your home(s) and market is your best defense against competitors discounting.

First, know your product and homeowners. For each home, make the effort to identify the homes with which it competes, including other homes you manage, in terms of size, features, quality, proximity and consumer appeal.

One of your homes may be a commodity, like numerous others, that competes for renters during a low occupancy season; you have to discount to maintain your historic share of rentals

Another home may be unique and does not need to be discounted during low occupancy seasons because it has no peers, because its peers are not being discounted or because all competing homes are in your own rental program

Work to understand whether you lose money on seasonally discounted homes after add-on fees are taken into account. If not, don’t hesitate to match competitive discounts during off-peak times where this will make your homeowner happy and keep his peak season rents in your program.

Offseason rents are often so low that they lose money for rental managers. Where offseason rentals benefit homeowners only, match competitive discounts only where necessary to prevent your homeowner from leaving.

Also remember that homeowners, especially those with good homes, generally prefer rental programs that offer homes of equal or higher quality. In this case, think about whether losing or retaining a homeowner over your discount policy will nudge other homeowners to join or leave your rental program.

Secondly, make sure you monitor and understand your market.

What’s Up with Your Competitors?

If you have aggressive or up-and-coming competitors, you might have no choice but to match or beat their discounts to prevent them from “buying” market share by hijacking your customers (“We have more quality homes” or “We get more rentals per home.”)

If you know most of your competitors won’t discount aggressively during lower occupancy seasons, you can ignore an occasional competitive discount and hold your prices at levels renters are willing to pay for the week in question.

If you have multiple competitors who are discounting during a time when supply exceeds demand, your options are to match every discount or risk foregoing any rental for the period in question.

Mature or Growing Market: You must fight hard to retain your homeowners if your market has matured, exemplified by little or no growth of rental homes in your area.

Tracking the balance of supply and demand for each week of the year

When there is more supply than demand; renters have bargaining power thanks to the Internet—price competitively or forego the rental after asking yourself: If I get fewer rentals than competing homes, will more homeowners leave me than if I match discounts? Where will I likely lose the most money?

Price right initially by monitoring the duration and amount of seasonal discounting by competing homes. Then monitor your competitors’ discounting and booking pace. Decide how discounting is likely to cause your inventory to decline, hold steady, or grow. Think carefully about whether your company’s long and short-term interests conflict:

Do you need to match competitors’ discounts and lose money for a few rentals in order to protect several years of revenue?

Is a competitor stealing your inventory and hurting your brand image by discounting steeply to get bragging rights that attract your homeowners (“I booked more rentals than my competitors.”)?

Do you dominate any market by managing most of the homes in a particular category so you can maximize revenue by refusing to discount at all?

What we thought of as “discounting” yesterday is today better thought of as “dynamic pricing” that requires quick adjustment in response to supply and demand. The pressure to discount cannot be successfully addressed by inflexible policies. It is easy to calculate how discounting will erode your historical rental income in the short-term. It is more difficult, but more necessary in today’s Internet world, to acknowledge that the decision to discount or not has both short and long term consequences that often conflict.

As the worldwide leader in online vacation rentals, HomeAway® continues to invest in building broad-based awareness to travelers nationwide. This year our brand team has decided to forego Super Bowl advertising and focus on a campaign promoting families and groups ‘staying together’ in a vacation rental home.

The new national advertising campaign, centered around the key message “Let’s Stay Together,” focuses on families and groups creating lasting memories out of where they stay, not just where they go. The HomeAway ad campaign licenses the rights to Al Green’s 1972 classic hit, “Let’s Stay Together,” and debuts in select markets during the January 15, 2012 NBC television broadcast of the 69th Annual Golden Globe Awards.

We believe investing in a long-term campaign with ongoing communication, rather than on a brief Super Bowl ad, will have a much bigger impact on the marketplace by bringing traveler awareness to our amazing category! The goal with this 2012 advertising campaign, which kicks off next week is to confirm HomeAway’s commitment to building the vacation rental category as a whole and increasing traveler demand for vacation rentals. If you’d like to learn more about the campaign, please read this blog by our co-founder and CEO Brian Sharples.

We invite you to join us for a webinar this Thursday, January 12, at 2pm CST. The presentation will provide a sneak peek of our upcoming ads and discuss the overall campaign strategy to ultimately bring you more travelers. Just click on this link to sign up and join us.

They call him Mr. Florida. Michael got his degrees in Chemistry and Microbiology from the University of Florida and USF, respectively, spent much of his career with various medical diagnostic companies as Director of Marketing and ran a medical consulting company. As he sought his next steps, he took a temporary job in vacation rentals, fell in love with the industry and switched careers by joining Instant Software® nine years ago. Today he is the Relationship Manager responsible for HomeAway Software clients in Florida, Georgia and internationally. Michael offers decades of experience to analyze business problems and recommend ideas to improve his customers’ bottom lines.

His favorite pastime is golf, he plays a nine-handicap, and his favorite place to golf is Pebble Beach. If nothing else, the guy sure knows great golf courses in many of the greatest vacation spots across the country, and loves working with vacation rental managers.

“Having worked with HomeAway for almost a year now, I have seen firsthand the dedication of every individual, right up to the CEO, to make the vacation rental industry more successful. They realize that our clients, property management companies, are an integral part of making this industry grow and they are committed to providing the tools and services to make our clients successful. I look forward to be representing HomeAway Software for Professionals for a long time and working closely with every one of my clients to ensure their success.”

The HomeAway Software for Professionals™ blog has made the move to join the Community blog, PM Perspectives. As you may know, this blog is currently written by industry veteran George Volsky and highlights the vacation rental industry from a property manager’s point of view. George’s insights will continue to be posted each month, now with the addition of content from the HomeAway Software Management team, bringing news and perspectives from the software side of the property management industry.

Community is committed to continue the sharing of insights and perspectives of the industry as a whole. With the recent addition of a dedicated section to property managers, there is a great opportunity to have many of our friends and colleagues together in one space to contribute and share their ideas and experiences. Let us be the first to welcome you to the revamped PM Perspectives blog.

For those interested in reading through the archives of the HomeAway Software for Professionals blog, please see the following links:

When HomeAway Software for Professionals™ was born in late 2010, we decided to continue the Instant Software® tradition to hold RezFest® as the premier software user conference in the industry. In doing so, we had a simple goal in mind: to make RezFest 2011 bigger, better, more fun and more professional than ever! Thanks to all of you showed up in Vegas for RezFest 2011, we surpassed expectations on all fronts!

Now that we have rested for a couple of weeks, gathered our thoughts and received survey feedback, I can share why RezFest 2011 was so successful. On a year-on-year analysis, conference attendance increased by 60%, with 80% more individual companies and 78% more sponsors attending than last year - thank you! We also provided more networking opportunities. Check out some of the fun photos from the opening night reception featuring the Blues Brothers impersonators to hitting the lanes on bowling night. Was that fun or what? Many clients thought RezFest was the best industry event they have attended and several of them were hugging us by the end of the conference! Here are a couple quotes from actual attendees that capture the moment:

“This was our first time at RezFest and we are now making sure that event is in our budget from now on. Worth every penny spent.”

“If you only attend one convention next year, it should be RezFest. It is the premier event for the vacation rental manager. You will meet wonderful people and learn so much. At RezFest you work hard, and play just as hard. Don't miss it!”

With 76 track combinations, we tried to offer a diverse and interesting agenda. Presenters did an amazing job and your appreciation was reflected in your survey responses. The large computer lab manned by the customer support team was also a tremendous success, giving clients the opportunity to be trained and/or ask questions about your particular software. Again, based on your feedback, the software lab was regarded as a valuable addition because it provides staff members from all levels of your organization a chance to work hands on with our team of experts. The agenda was so packed with engaging material that some of you asked that we make the show a day longer next year! Wow, that is a first where attendees ask for more time at a trade event!

During HomeAway CEO, Brian Sharples’ keynote, he explained why HomeAway acquired Escapia® and Instant Software and addressed industry fears to demonstrate how committed HomeAway is to the PM segment. By the end of his presentation, everyone seemed to have understood HomeAway’s strategy and felt much more comfortable with Hideaway’s acquisitions from about a year ago. Throughout the show, clients were able to mingle and with HomeAway’s executive team. I think customers were surprised by how accessible and down-to-earth Brian Sharples, COO Brent Bellm and the other executives were in person.

Peter Greenberg, the other RezFest speaker, was an energetic and informative speaker as he emphasized that the “personal contact” property managers provide to their guests 24/7 is key. He also focused on “selling value to the right demographics,” particularly to Boomers. Greenberg’s bullish perspective on the travel industry in the coming years was encouraging and the 2011 performance of many PMs in the room this year prove that he may be on track with his predictions.

I hope HomeAway demonstrated our commitment to your success and have your interests at heart. We will continue to operate in a professional and straightforward manner, with the 120 employees in HomeAway Software for Professionals dedicated to building the best possible software solutions and keeping dialog going with you and the Support and Relationship Manager staff. To use a construction analogy, we feel 2011 has been focused on building the foundation of a great house of the future. Next year will be a year of INNOVATION that will add marble counter tops, state of the art light fixtures and simple details to save you time and money. Our goal is to take your software solution to extraordinary levels of efficiencies using a modular approach that builds on top of your existing platform. It is not an easy and it takes time but like we said in late 2010, “judge us by our actions.”

Thank you for attending RezFest! For those of you who could not attend this year, please join us next year. You will not regret it!

I’m excited to announce Community for Property Managers, a new online resource for professional vacation rental managers.

The vacation rental management business is tough because there are many ways of going about it. The Community for PMs will share snapshots of how successful property managers grow and streamline their respective businesses.

The site is launching November 10, 2011, and will be seeded with a rich sample of content. The variety of resources will increase rapidly over the next year with your contributions to its articles and forums.

Sure! All sites want great content, but few achieve this. Why should this Community be different? Because resources will be contributed by members of the industry itself, making up the “Community.” Users will learn and share content via forums, share and seek advice with one another and form groups with fellow users to pool resources on a variety of topics and issues.

How will we foster this? Community for PMs is designed around a “give-to-get” information exchange. Members will give opinions and advice regarding their business experience with an interest to see others’ answers.

Key Features of the PM Community

How-To-Articles. Vacation rentals are a complex business. The Community will offer a continuing steam of “how-to” insights on discounting, growth and other common industry challenges and trends.

Forums are available for managers to exchange comments. These will grow in lock step with content and participation. We expect to see forums for industry trends, vendor products and relevant industry news.

Statistics (available in 2012) will provide perspective to the booking trends experienced by individual rental managers.

Vendor Showroom - I am especially proud of HomeAway here: we are planning to include a Community Vendor Showroom that will be free and open to all—including HomeAway competitors to provide PMs the ability to browse and rate products and service providers for their managed homes. This is a bold move. But we are hoping this will provide an incredible value to our PMs

I’ll host Webinars where guest speakers share insights. One of our first webinars, “Hybrid Business Models,” will show how a rent-by-owner business morphed over five years into a PM with five hundred homes under management by incorporating best practices of both PMs and rent-by-owners. Subsequent webinars will address difficult industry challenges in the realm of rate setting, finding growth in maturing markets and channeling employee conflict.

Polls will be utilized to gauge opinions on topics such as booking trends, financial effects of discounting and the impact of social media on the industry.

Community will also offer business support tools. Our first example is a spreadsheet tool that will help calculate the dollar value of a single home—illustrating how much is at stake when a homeowner is added or driven away. Soon, our “What-is-it-Worth” valuation tool will help calculate the value of a vacation rental management firm.

Community for PMs Will Belong to the Industry. Community is designed to attract and benefit all segments. No cost. No strings. Our goal is to build this industry and welcome any efforts towards that goal.

So come on in. See what’s there now. Let your imagination show what you can help it become. Then contribute what you can, take what you need and help make this a fabulous Community.

Who Should Go to RezFest? It’s not just for HomeAway Software for Professionals (HASP) Customers.

I was a consultant to many property managers (PMs) during my first 12 years in the vacation rental industry. I learned two things that are generally, but of course, not always-true:

Companies that attend industry events are the most hungry to learn and compete well;

The biggest benefit of industry events is the sharing of information among attendees.

Let me qualify this quickly, so as not to offend some very good companies that don’t do a lot of professional socializing: there are many excellent companies that don’t attend industry events.

With that acknowledgment, let me further say that every management company would benefit by attending industry functions. Why? “THE INTERNET is changing this industry’s business models and forcing rapid industry evolution.”

More than at any time in the industry’s history, it is critical today that PMs keep track of changes. No matter how strong or aggressively they monitor their own markets, they cannot afford to ignore the changes in other markets because:

Key trends start in a few markets and spread to others;

In my opinion, our industry’s occupancy rate (under 40%) and short peak season (often just 6 weeks) means that PMs often need more than one year lead time to adjust to trends.

Industry events are where PMs discover minor changes they are feeling can be the beginning of major trends that can alter the competitive pecking order.

The question is which industry event to attend. Every company has limited travel budgets, and there are many industry events to choose from such as:

National associations

State associations

Local tourism bureaus

Reservation software user conferences

Regional conferences sponsored by industry vendors

Regional symposiums

Online webinars

So Which Events Should PM’s Attend?

It comes down to:

Budget: what is the cost and how many events can you afford?

Size of the conference: larger conferences offer more courses and more PMs to talk to;

If you are looking to attend a larger conference, there are two worth noting…RezFest and the annual VRMA conference. Because HomeAway puts on Rezfest, we have some additional insight into the event. You can also learn more information about Rezfest here.

Who Will Benefit from RezFest?

HASP Customers. Rezfest is organized around reservation software training and updates: it has different tracks for each of its reservation software products. So Rezfest is certainly good for HASP software customers. Rezfest brings technicians and trainers, as well as the administrative staff who price software and decide which features to add to one location. Rezfest is a good opportunity to get low-cost training, learn about new features, and interact with software staff who need to understand your problems and needs.

Those Who Want to Explore Industry Products and Suppliers. RezFest is one of the industry’s largest events, and accordingly, attracts the industry’s major vendors. This is an opportunity for PMs to meet with key suppliers to compare features and prices, and talk to other managers who use these products.

Those Who Want Trend and Leadership Education. By virtue of the size of HASP’s enormous customer base, RezFest attracts one of the industry’s largest aggregations of managers and leaders. As one of the industry’s largest supplier of reservation systems, Rezfest product and service reps deal daily with the effects of industry change across the country, and are well equipped to help PMs understand and adapt to national and regional changes. This translates into sessions and seminar content that:

Highlight trends and issues;

Explain the evolving role of Internet marketing and technology;

Discuss the industry’s most vexing problems and solutions;

Offer thought leadership insights by key industry leaders.

Employee Rewards. Where there is a business advantage to attending RezFest, there is also the opportunity to reward employees by sending them to Rezfest. The event is historically held in fun locations and provides opportunities to interact with fellow PMs in a relaxed social setting.

Many PMs Who Are Not Already HASP Customers Can Benefit by Attending RezFest

Many will find RezFest less expensive than alternative gatherings while still offering substantial socialization, education and product information benefits:

Rezfest offers one of the largest gatherings of leading industry vendors;

The level of expertise in HomeAway’s family of products and partners is unparalleled;

It’s a preferred choice for those who can drive or otherwise incur less expensive travel.

RezFest is a great opportunity for PMs looking to buy or change reservation software.

While many managers can identify features they like in a software, most have difficulty charting the features that aren’t in a new software, until it’s too late.

The HASP family offers multiple reservation software products. RezFest is the ideal location for learning which of them are best suited for a PM and, in fact, the best place to confirm that the HASP family of products will not suit your needs (if that is true).